No savings & applying for a mortgage

H

Happy

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Not sure if this is in the right section. Apologies if not.

Current mortgage balance €250k no arrears.
Equity in home €110k

We plan to trade up but the new build has become available 6 months earlier than expected
We will require mortgage of up to €270k
We have absolutely no savings

Partner is in permanent full time employment

I have just returned to my permanent part time job after a 3 year leave of absence

We are clearing credit card & can save from January

No other outstanding loans

Is there any chance we would be eligible for a new mortgage or would we be automatically rejected?

Also can we use equity on existing home for 10% deposit when signing?
 
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You have equity of 110 in your current house, can you release some of this to cover your deposit? Bank may take your mortgage repayments history in lieu of a savings record but I am not sure if this remains the case (they used to take rental payments into account).
 

Are you sure you will be able to meet the repayments on a bigger mortgage, given that you have no savings?

To buy another house, you will have to sell your own first.
It would be way too risky to buy another house before selling your own. If prices fell in the meantime, then you would not be able to afford the much higher mortgage you need.

However selling your house first is also risky. The house you want may well be sold by the time you are ready to buy and house prices might move up in the meantime.

The figures you give are too tight for allowing you to move. What's the rush. Pay off your debts and save for a year. This will give you the bit of flexibility to handle the risk of moving.
 
We're coming out of a fixed rate in Feb so our mortgage repayment will be the same or even lower based on current rates so my thinking is were swapping one repayment for the other.
We would sell existing house subject to completion of new build.

Anyway I was just wondering would the banks laugh at us

Thanks
 
Indication is that you will be looking at a new mortgage application before sale of your existing property. This is a non-runner in the current market if so! You have a good repayment record so there is no reason why you would not be eligible for a 270k mortgage with a c110k input to your new purchase. However, you will need to sell your current home before any full approval of a new mortgage would be considered!
 
The bank will look for an ability to repay the new mortgage under stress tested conditions (add 2% to the variable rate).

You can use your current mortgage repayments as part of that ability to repay. You need to make up the difference through saving or loans that have discontinued. As you don't have any other debts, it will have to be savings.

As you are building yourself, you are going to have a long lead in time before you can move into your new home. The underwriters will look at what they are exposed to...you having two mortgages. You need to pass the stress test of having two mortgages.


Steven
www.bluewaterfp.ie
 
thanks for your help guys. Just to clarify it is a new build being sold in a development. Builder releasing earlier than we expected as there is a demand hence why we couldn't hold off. Good news today with rates anyway!!!
 
Happy said:
. Builder releasing earlier than we expected as there is a demand hence why we couldn't hold off.
Click to expand...

This is where things go pear shaped.

Why do you want this house.

Why do you need this house.

How do you know it is well built.

What is wrong with your current home.

Don't put yourself under pressure just because it is released early.

Can you post up some actual figures. Salary, current mortgage repayment, interest rate etc.

Based on what you've posted, the best advice is to sell, get the money, and then buy.

You mentioned you've just gone back to work, does this now mean extra child care costs. Why is there credit card debt that will not be paid off until January, with Xmas just around the corner and zero savings?

These are just some of the things you need to think about.

Based on what you've posted,
 
Hi

Reason for moving is better quality home. We need to upgrade heating, windows bathrooms etc which will cost as much as moving to bigger better house. Also we would not get approval for additional loan on top of current mortgage of €1550pm

Childcare costs €100 pm

Salary €57k & €22k
Both permanent

Credit card debt due to one income for last 3 years & will be cleared using November & December salary allowing for Christmas
 
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